Determinants of the Upsurge in M1 Demand in Japan: Evidence from Household-Level Analysis

Wataru Suzuki

Gakushuin Economic Papers, 2008, vol. 45, issue 2, 81-101

Abstract: This paper investigates why M1 demand rose rapidly in Japan between 1996 and 2002 by applying household analysis. We find that: (1) aging and a widening income gap are responsible for around 10−30% of the overall rise in household M1 demand; (2) the growth in M1 demand in households whose head is aged 50 or over and that in poor households account for 70−90% of overall growth in M1 demand; and (3) households in which M1 demand rises significantly have relatively high interest elasticities of M1 demand.

Keywords: M1 demand; interest elasticity; household analysis (search for similar items in EconPapers)
JEL-codes: E2 E4 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:abc:gakuep:45-2-1

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